Yahoo Finance Earnings Release: Here's Why Analysts Cut Their EHang Holdings Limited (NASDAQ:EH) Price Target To US$27.50
Shareholders will be ecstatic, with their stake up 21% over the past week following EHang Holdings Limited's (NASDAQ:EH) latest full-year results. EHang Holdings reported revenues of CN¥117m, in line with expectations, but it unfortunately also reported (statutory) losses of CN¥4.96 per share, which were slightly larger than expected. The analyst typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analyst has changed their earnings models, following these results.
View our latest analysis for EHang Holdings
Taking into account the latest results, the most recent consensus for EHang Holdings from solitary analyst is for revenues of CN¥411.8m in 2024. If met, it would imply a substantial 251% increase on its revenue over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 85% to CN¥0.80. Yet prior to the latest earnings, the analyst had been forecasting revenues of CN¥431.1m and losses of CN¥0.75 per share in 2024. Overall it looks as though the analyst are negative in this update. Although revenue forecasts held steady, the consensus also made a pronounced increase to to its losses per share forecasts.
The consensus price target fell 9.3% to US$27.50, with the analyst clearly concerned about the company following the weaker revenue and earnings outlook.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. For example, we noticed that EHang Holdings' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 251% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 8.5% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 6.5% per year. So it looks like EHang Holdings is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at EHang Holdings. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Furthermore, the analyst also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.
It is also worth noting that we have found 2 warning signs for EHang Holdings that you need to take into consideration.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
